J. CLENTON HENSON AND SHEILA HENSON LUTZ, PETITIONERS V. UNITED
STATES OF AMERICA
No. 88-514
In the Supreme Court of the United States
October Term, 1988
On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Sixth Circuit
Brief For The United States In Opposition
TABLE OF CONTENTS
Questions Presented
Jurisdiction
Statement
Argument
Conclusion
The opinion of the court of appeals (Pet. App. 1a-23a) is reported
at 848 F.2d 1374.
JURISDICTION
The judgment of the court of appeals was entered on June 15, 1988,
and a petition for rehearing was denied on July 28, 1988 (Pet. App.
31a). The petition for a writ of certiorari was filed on September
26, 1988. The jurisdiction of this Court is invoked under 28 U.S.C.
1254( l).
QUESTIONS PRESENTED
1. Whether the warrant that authorized the search of petitioners'
business office was sufficiently particular under the Fourth
Amendment.
2. Whether petitioner Henson was properly convicted under 15 U.S.C.
(& Supp. IV) 1990c(a) for causing the transferors of motor vehicles
to give false statements to the transferees concerning the cumulative
mileage registered on the vehicles' odometers.
STATEMENT
Following a jury trial in the United States District Court for the
Western District of Kentucky, petitioners J. Clenton Henson and Sheila
Lutz were convicted on one count of conspiracy to commit mail fraud,
in violation of 18 U.S.C. 371. Petitioner Henson was also convicted
on six counts of causing a transferor of an automobile to give a false
odometer statement to a transferee, in violation of 15 U.S.C.
1990c(a). /1/ Henson was sentenced on the conspiracy count to a
four-year term of imprisonment and a fine of $120,000. He was also
sentenced to one-year terms of imprisonment on the Section 1990c(a)
violations, which were made to run concurrently with each other and
with his sentence on the conspiracy count. Lutz was sentenced to a
one-year term of imprisonment and a fine of $10,000. The court of
appeals affirmed (Pet. App. 1a-23a).
1. The evidence at trial is summarized in the court of appeals'
opinion (Pet. App. 2a-6a). It showed that petitioners were involved
in an extensive odometer-tampering scheme. Petitioner Henson and
others would purchase large numbers of late-model, high-mileage
automobiles and resell them to local dealers for resale to the public.
For a fee of $50 or $100, Henson would provide the dealers with an
odometer statement that understated the automobiles' true mileage.
Henson would also use a variety of methods to conceal the odometer
scheme, including altering or fabricating the original title
certificates. To accomplish that, petitioner Lutz and others would
forge dealers' names on bills of sale, odometer statements, automobile
titles, and registration forms. Pet. App. 2a-5a.
During their investigation of the odometer scheme, federal and
state law enforcement officials executed a search warrant at
petitioners' business premises in Benton, Kentucky (Pet. App. 6a). In
an affidavit submitted in support of the application for the warrant,
a postal inspector described the 15-month investigation culminating in
the request for the warrant. The inspector explained, in particular,
that he had personally investigated 76 automobiles that petitioners
had purchased in California from June through December 1983. For each
of those cars, the inspector reviewed the titles and auction invoices
obtained from the California auctioneers and compared them with the
corresponding Kentucky registrations, title applications, inspection
forms, and odometer statements. In each case, the inspector stated,
the mileage listed in the Kentucky documents was significantly lower
than the mileage stated in the California documents. Id. at 10a-11a.
The affidavit for the warrant also recounted the inspector's
conversations with two automobile dealers, who reported that
petitioners had routinely offered them false odometer statements in
return for a set fee (id. at 11a-12a). On the basis of those
allegations, the magistrate issued a warrant to search petitioners'
business premises for "any and all records" including, but not limited
to, specific items relating to the odometer scheme. /2/
2. The court of appeals affirmed (Pet. App. 1a-23a). The court
rejected the contention (id. at 15a-17a) that the search warrant was
insufficiently particular. It noted that the inspector's affidavit
"suggested an ongoing scheme to purchase automobiles and resell them
with tampered odometers," and the court had "no hesitation" concluding
that "there was probable cause to support a search of this breadth"
(id. at 17a). In short, the court found (ibid. (citation omitted)),
"the warrant in this case was as 'specific as the nature of the
activity under investigation permitted.'" The court also rejected (id.
at 18a-21a) petitioner Henson's contention that he was improperly
convicted under 15 U.S.C. (& Supp. IV) 1990c(a) because he was not a
"transferor" of an automobile. The court explained that even if
Henson was not himself a "transferor," he was nevertheless within the
ambit of Section 1990c(a) because he had caused a transferor to make a
false statement concerning the mileage of the automobiles (Pet. App.
19a-20a). /3/
ARGUMENT
1. Petitioners first contend (Pet. 9-16) that the search warrant
was insufficiently particular and that the warrant should have limited
the search to the files relating to the 76 automobiles that the
inspector had investigated. The court of appeals correctly rejected
that contention.
The Fourth Amendment particularity requirement is designed to
prevent "'general, exploratory rummaging in a person's belongings.'"
Andresen v. Maryland, 427 U.S. 463, 480 (1976) (quoting Coolidge v.
New Hampshire, 403 U.S. 443, 467 (1971)). But where the underlying
affidavit establishes sufficiently broad probable cause, the warrant
may authorize a comparably broad search and seizure. For example, in
United States v. Bright, 630 F.2d 804 (5th Cir. 1980), the defendant
contended that a search warrant should have been limited to currency
bearing particular serial numbers, in view of the fact that the
government knew before the search that currency with those serial
numbers would be found in the defendant's house. Rejecting that
contention, the Fifth Circuit held that because the government had
established probable cause to search for more than those specific
bills, the warrant was entitled to encompass all currency in the
defendant's possession. 630 F.2d at 811-812.
More recently, the Eighth Circuit made the same point in United
States v. Kail, 804 F.2d 441 (1986). There, the court upheld a
warrant that permitted the seizure of "almost all of the (defendant's)
business records." The court reasoned that "there was probable cause
to believe that fraud permeated the entire business operation." 804
F.2d at 445.
The First Circuit took the same view in United States v. Brien, 617
F.2d 299, cert. denied, 446 U.S. 919 (1980). In that case the court
of appeals approved a warrant that concededly covered most of the
defendant's business records (617 F.2d at 306). The court determined
that the affidavit in support of the warrant showed that the
defendant's fraud was "so extensive as to justify a belief by the
magistrate that all these documents were likely to constitute evidence
of the crimes under investigation" (ibid.). Like petitioner, the
defendant in Brien contended that the warrant should have been limited
to particular customers about whom the authorities had specific
information. The First Circuit rejected that claim, noting (id. at
307-308) that there was a sufficient basis to believe that the
defendant had engaged in similar practices with his other customers.
Accord United States v. Sawyer, 799 F.2d 1494, 1508 (11th Cir. 1986),
cert. denied 479 U.S. 1069 (1987) (holding that evidence of pervasive
fraud justified a warrant that was not limited to the 25 transactions
specified in the affidavit); United States v. McClintock, 748 F.2d
1278 (9th Cir. 1984), cert. denied, 474 U.S. 822 (1985); United
States v. Offices Known as 50 State Distributing Co., 708 F.2d 1371
(9th Cir. 1983), cert. denied, 465 U.S. 1021 (1984); United States
v. Hillyard, 677 F.2d 1336 (9th Cir. 1982); National City Trading
Corp. v. United States, 635 F.2d 1020 (2d Cir. 1980).
Here, the warrant (Pet. App. 15a-16a) authorized the agents to
seize the records found on petitioners' business premises. The court
of appeals' fact-bound determination (id. at 17a) that there was
sufficient probable cause to justify such a search is correct. /4/
The affidavit did not simply disclose 76 discrete instances of
odometer tampering. Rather, the affidavit showed that petitioners
routinely offered dealers fraudulent odometer statements. Thus, the
issuing magistrate was entitled to infer that the 76 profiled cases of
understated odometer readings represented merely "the tip of the
iceberg" (United States v. Brien, 617 F.2d at 308).
The court of appeals' decision is not in conflict with this Court's
decision in Andresen v. Maryland, supra. In that case, the Court held
that a general phrase in certain warrants, authorizing the police to
search for "other fruits, instrumentalities and evidence of crime"
(463 U.S. at 479), must be read in context with the full text of the
warrants, which authorized the search for and seizure of material
relevant only to petitioner's activities in connection with a
particular real estate conveyance. The Court did not hold, however,
that a search warrant must be confined to a particular transaction or
to a particular offense. Nothing in the Andresen case precludes the
government from conducting an area-wide search of a business's
premises where, as here, there is probable cause to believe that the
entire business is permeated by fraud.
Petitioners' reliance (Pet. 12-13) on the Eighth Circuit's
decisions in In re Grand Jury Proceedings, 716 F.2d 493 (1983), and
Rickert v. Sweeney, 813 F.2d 907 (1987), and the First Circuit's
decision in United States v. Abrams, 615 F.2d 541 (1980), is also
misplaced. In those cases the courts of appeals found that the
warrants exceeded the breadth of the underlying probable cause. See
In re Grand Jury Proceedings, 716 F.2d at 498-499; Rickert, 813 F.2d
at 909; Abrams, 615 F.2d at 544 & n.7. /5/ The same courts have made
clear, however, that "(a)ll business records may be seized * * * if
probable cause exists to believe that the entire enterprise has
engaged in a pervasive scheme to defraud" (Rickert, 813 F.2d 909;
accord United States v. Kail, 804 F.2d 441, 445 (8th Cir. 1986);
United States v. Brien, 617 F.2d at 306). Applying that standard in
the present case, the court of appeals found that the inspector's
affidavit "suggested an ongoing scheme to purchase automobiles and
resell them with tampered odometers" (Pet. App. 17a). The court
therefore concluded that "there was probable cause to support a search
of this breadth" (ibid.). That fact-bound determination warrants no
further review.
2. Petitioner Henson contends (Pet. 16-19) that he was unlawfully
convicted under 15 U.S.C. (& Supp. IV) 1990c(a). That statute
attaches criminal liability for violations of other provisions of the
statute. In this case, petitioner was charged under 15 U.S.C.
1988(b), which prohibits a "transferor" of a motor vehicle from making
a false representation to a transferee about the mileage of the
vehicle. Petitioner contends that he was not a "transferor" of
automobiles and that he therefore did not fall within the reach of
Section 1988(b). For that reason, he argues, the criminal sanctions of
Section 1990c(a) cannot be imposed against him.
The court of appeals correctly rejected that contention. By its
terms, Section 1990c(a) applies not only to persons who violate other
provisions of the Act, such as Section 1988(b), but also to persons
who "cause" acts to be done that violate those provisions. In this
case, petitioner Henson caused others to make false statements to
transferees regarding the cumulative mileage registered on odometers.
That conduct constituted causing acts to be done that violated Section
1988(b), and thus was subject to the criminal sanctions of Section
1990c(a). As the court of appeals noted (Pet. App. 19a-20a, 21a),
there was sufficient evidence for the jury to find that Henson
"adopted a transferor's acts and capacity by causing a transferor to
commit a criminal act" (id. at 20a).
The Ninth Circuit's decision in United States v. Powell, 806 F.2d
1421 (1986), is not to the contrary. As the court below noted (Pet.
App. 20a-21a), and as petitioner acknowledges (Pet. 18 n.21), the
Ninth Circuit in Powell agreed that it is "certainly" a "viable
theory" to a charge a defendant under Section 1990c(a) with having
caused a transferor to make a false statement of mileage; but because
the government in the Powell case had not raised that claim in the
lower court, and because the indictment and the jury instructions had
identified the defendant as a transferor, the court refused to reach
the merits of the government's contention. Finally, petitioner
contends (Pet. 19) that unlike Section 1988(b), which does not apply
to persons who cause a false statement to be made, 15 U.S.C. 1984
expressly covers persons who "cause" an odometer to be altered. The
fact that petitioner might also have been prosecuted under that
statute, however, is not a reason to ignore the plain language of
Section 1990c(a). And it is under Section 1990c(a) that petitioner
was convicted for causing a transferor to violate Section 1988(b).
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
CHARLES FRIED
Solicitor General
JOHN R. BOLTON
Assistant Attorney General
JOHN F. CORDES
LAWRENCE G. MCDADE
Attorneys
NOVEMBER 1988
/1/ Henson was acquitted on four counts of mail fraud under 18 U.S.
C. 1341. The government dismissed a fifth mail fraud count during
trial. Henson was also acquitted on four other counts charging
violations of 15 U.S.C. 1990c(a). Lutz was acquitted on five counts
of mail fraud.
/2/ In full, the warrant authorized the police to search for (Pet.
App. 15a-16a):
any and all records, but not limited to modules, modems and
connectors, computer, computer terminals, hard copy user
documentation pertaining to files and/or programs, cables,
printers, discs, floppy discs, tapes, vendor phone numbers, all
original and backup tapes and discs, any other informational
data input, all vendor manuals for hardware and software,
printouts, receipt books, ledger books, ledger cards, records of
sales, odometer statements, file records on individual used car
dealers, file records, payment receipts, bank transaction
records, invoices regarding the purchase of used vehicles,
automobile auction company records and/or lists, any
correspondence from auto auction companies, and any motor
vehicle titles for the period from June 1983 through the
present, including but not limited to the following individuals
and companies:
Clinton (sic) Henson, Henson Motor Company, Sheila Henson
Lutz, Allen (sic) Henson, Ronnie Walston and/or Waltson Used
Cars, Charles Haley and/or Haley Used Cars, Charlie Aldridge, 79
Motors, Bob Pugh, Ralph Lutz, Shane Howard and T.S. Motors.
Also, any other used car dealers conducting business with
Henson Motor Co., and/or Allen (sic) Henson. It is also
requested that the vehicle identification number and/or tag
number be recorded on any vehicles found in the parking lot
surrounding the building.
/3/ The court of appeals also held that the mails had been used for
the purpose of executing the odometer tampering scheme; that the
affidavit in support of the warrant did not contain material
misrepresentations; that the information contained in the affidavit
was not stale; that in executing the search, the officers did not
impermissibly exceed the terms of the warrant; and that the district
court did not improperly enhance certain of the fines under the
Criminal Fine Enforcement Act, 18 U.S. 3623 (now repealed). Pet. App.
7a-15a, 17a-18a, 21a-23a. The petition does not present any of those
issues.
/4/ In assessing the sufficiency of probable cause this Court has
made it clear that the issuing magistrate is to "make a practical,
common-sense decision whether, given all the circumstances set forth
in the affidavit before him, * * * there is a fair probability that
contraband or evidence of a crime will be found in a particular
place." Illinois v. Gates, 462 U.S. 213, 238 (1983). A reviewing
court need only ensure that the magistrate had a "substantial basis"
for finding that probable cause existed (id. at 238-239), bearing in
mind that affidavits are to be reviewed "in a commonsense and
realistic fashion" (United States v. Ventresca, 380 U.S. 102, 108-109
(1965)), and that the judgment of the issuing magistrate is entitled
to considerable deference (Ventresca, 380 U.S. at 109; United States
v. McQuisten, 795 F.2d 795 F.2d 858, 861 (9th Cir. 1986); United
States v. Ellison, 793 F.2d 942, 946 (8th Cir.), cert. denied, 479
U.S. 937 (1986); United States v. Lamport, 787 F.2d 474, 476-477
(10th Cir.), cert. denied, 479 U.S. 846 (1986); United States v.
Travisano, 724 F.2d 341, 345 (2d Cir. 1983)).
/5/ The Ninth Circuit noted a similar infirmity when it invalidated
the search warrant in United States v. Cardwell, 680 F.2d 75 (1982).
The court explained that, based on the underlying investigation, "'the
government knew exactly what it needed and wanted and where the
records were located.'" Accordingly, the court reasoned, "'(t)here was
no necessity for a massive re-examination of all records bearing on
income and expenses.'" Id. at 78 (citation omitted).